Both stocks fell on the news. Beazer got hit particularly hard though, plunging nearly 14% compared to a 3.5% drop for Horton. Traders on StockTwits had a lot of thoughts on why housing stocks were pulling back.

That is bad news, and it can help explain why Beazer's shares were being pummeled. Also, even though sales did top estimates, a loss is still a loss. Horton may have missed on earnings, but it is profitable.

Nonetheless, the whole housing sector was looking weak Monday. The SPDR S&P Homebuilders ETF (XHB) was down about 1%, extending a slide from last week. It makes sense though. Even with the recent slump, this ETF is still sitting on a nearly 50% year-to-date gain. Nearly all housing stocks have enjoyed a huge rebound in 2012 on the hopes that the worst was finally over for the market.

I did a video last week about how all housing stocks could be in for some short-term pain after the outlook from real estate listing site Zillow (Z) was not as strong as analysts were expecting.

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Traders are definitely noticing how the sector is losing momentum. Shares of Horton, as well as rivals KB Home (KBH), Lennar (LEN), Toll Brothers (TOL) and PulteGroup (PHM), actually all opened higher Monday and were unable to hang onto those gains.

2011pls: $KBH, $LEN, $PHM, $DHI, $TOL, let's see the bounce two business days in a row, if they don't bounce strong, i will sell my last piece

That's good news for consumers. But for investors, the builder story is running out of steam. Housing stocks need to do more than just confirm that the market is improving. They have to keep beating expectations to justify the huge run-ups they've all had this year.

Paul R. La Monica is an assistant managing editor at CNNMoney. He is the author of the site's daily column, The Buzz, and also tweets throughout the day about the markets and economy @LaMonicaBuzz. La Monica also oversees the site's economic, markets and technology coverage.